Legalized scalping

Missouri appears close to legalizing scalping (tickets, not heads).

The supply/demand arguments make a little bit of sense. (With legalized scalping there should be a greater supply, so prices will go down.) But that is dependent upon demand remaining steady. And I suspect there are people who refrain from buying scalped tickets — not because the price is higher, but they know they are ‘abetting a crime’ as the article puts it. Demand could go up as well. Maybe, as is so often the case on Ebay, supply will go up more.

It certainly falls in the category of ‘victimless crime’

0 thoughts on “Legalized scalping

  1. DL Emerick

    Supply of tickets, nominally, is fixed — regardless of the law — because the stadium seating is a fixed constant quantity.

    When a scalping law is imposed, supply itself does not change — there are no more tickets for sale, and none fewer, either.

    What the scalping market concerns is a secondary after-market, the one for the resale of already purchased tickets.

    Theoretically, if the scalping law were enforced, that market does not exist.

    In fact, it does — but it operates quite weakly. Hence, scalpers operate on a profit margin — buying and selling tickets illegally. They buy cheaply and they sell dearly — but not too dearly, for every ticket has an expiration date, after which it reverts to being mere paper trash. Still, the scalper pricing exploits those who selling tickets, by paying them too little, in the face of restricted resale market competition, as well as (much more mildly) exploiting purchasers of resold tickets — because most ticket events are not “Sold Out” — causing the printed price on a ticket to act as a sort of price cap.

    As a result, generally, the Team Owners (or whoever has the right to create primary market supply, by printing the tickets for sale) will, predictably, earn less money, as the after-market strengthens. Scalpers will also, generally, earn less money. Ticket buyers will benefit, by reduced pricing, generally, for tickets.

    With an assured resale market (to scalpers), though, there may be a greater willingness on the part of ticket buyers to buy tickets as possibly, but quite variably and erratically, as fungible instruments — as in pricing of options. If the option is not exercised (ie, the game attended), and if it has not yet expired, then a potential buyer might carry in his head the idea that he can easily resale, at some nominal loss, his ticket. This might lead him, occasionally, to treat buying tickets partially as an options event. This sentiment might counteract some of the decrease in Team Ticket Office sales losses. Under the right conditions, the sentiment could sometimes be strong enough to offset totally the expected primary loss in total ticket sales. (But, most teams would experience the converse, even if some hot team inspires such fan sentiments, from season to season.)

    The caveat to this analysis concerns the exceptional cases — of those events that are in a “Sold Out” condition.

    Now, if you believe, as I do, that in the face of a vast excess demand — where everyone wants to see the game, when obviously only a finite number can (seating capacity of stadium), why shouldn’t the free and fair (after)market price be allowed to float to whatever astronomical values that bidders desire to offer? Why should any interference with the ordinary workings of capitalism be tolerated, such as the ridiculous proposal to cap scalper prices to 120% of face value? Afterall, they can’t even enforce the present law, with ordinarily nominal (albeit illegal) resale prices!!!

    In the hot markets, when ordinary demand is almost surely in excess of supply, scalpers become quite professional, buying up blocks of tickets ahead of events, and thus may contribute disproportionately to rising ticket prices, by their total impact on the ticket market.

    But, remember, even in that case, that the true underlying cause (pricing variability) is excess demand — for supply never varies.

    In short, the scalping law has always been wrong, as a matter of intrusive and unwarranted government interference in free market economics.

    And, remember this, too: seeing a baseball game is not even close to being a necessity of life — even if you are the most fanatical of the “go-crazy, folks” fans. Hence, there is not even a shred of any moral necessity supporting the present laws interfering in the free markets, here.